Shooting the Naked Messengers

Last year, a 38-year-old named Judd Bagley found himself on Facebook, looking at the friend lists of reporters from The New York Times, The Wall Street Journal, Bloomberg, Barron’s and Reuters, and of wildly important hedge fund managers like Dan Loeb and David Einhorn.

Eventually creating a fake account, one person led to another. These people were all friends, he saw, and their friends were friends, too. A new chapter of a crusade was born.

Last month, Mr. Bagley, who had spent the past four years trying to show that certain investors are colluding with top journalists to bring down public companies, posted a list that included all these people and thousands of their friends, including their children.

The targeted journalists and investors are not amused. “It says, hey, we know who you are and we know where your family lives,” said Barry Ritholtz, a revered finance blogger whose name and his teenage niece’s were posted. “I would tell you this is a new field for them, and they’ve poked a stick in a hornet’s nest,” he said. “They fucked with New Yorkers’ families. That’s not tolerated in this town.”

As the manager of a resplendently furious Web site called Deep Capture, funded by the chief executive of the liquidated merchandise site, Mr. Bagley has become one of the most important, hazy and disliked figures in a bizarre campaign against an illicit kind of investing called naked short selling.

One problem about last month’s battle is that online friendship doesn’t necessarily prove real-life connections, and real connections happen to be necessary for competent journalism. And yet, even though this wasn’t the right way to start it, a serious argument about the relationship between finance writers, the titans they cover and the regulators that are supposed to be watching it all is worth having. For all their tremendous eccentricities, Mr. Bagley and his anti–naked-shorting movement may be onto something.


DEEP CAPTURE TEACHES that hedge fund managers and Wall Street journalists have become intertwined in a wide web. But the juiciest part of the lore is that there’s a “Sith Lord,” like in Star Wars, at the center of the evil. The Sith Lord turns out to be Sith Lords. “It’s Steven Cohen and Mike Milken, though I’ve never said that to a reporter,” says Patrick Byrne, Overstock’s CEO.

Mr. Cohen is the billionaire whose hedge fund, SAC Capital, has been besieged by recent ties to insider trading, plus a dementedly lurid sex scandal; Mr. Milken is the 1980’s junk bond king whose protégé Leon Black was sued by Mr. Byrne’s father, the former CEO of GEICO. Neither was included on a tally by the Web site Clusterstock of 20 people whose names most commonly came up on the huge Facebook list.

Most of the friends’ names, especially the children’s, were a lot less meaningful. “Posting the name of my 16-year-old son, what did that prove?” said the Barron’s editor Eric Savitz.

Later versions of the list were edited down to just the essentials, and it was a lot more interesting. At best, it’s a starting point for post-collapse questions about the ties between the people who wield power on Wall Street and the writers responsible for watching them. If it’s a good thing that the titanic hedge fund manager Jim Chanos tipped the then–Fortune writer Bethany McLean to the problems at Enron, for example, Deep Capture wants to ask what it means when Mr. Chanos largely steers clear of negative coverage afterwards. As Rolling Stone writer Matt Taibbi has wondered, did shorts and their media contacts have a squalid roll in the fiery collapse of Lehman and Bear Stearns? And if they did, would it be a problem?


JUST BEFORE THANKSGIVING in 2005, Mr. Bagley had an epiphany. “I don’t know how, but I think my life just changed,” he told his wife.

Mr. Bagley was getting into his car after taping a two-hour podcast interview with Mr. Byrne.

When he got home and listened to the tape, it was empty.

Shooting the Naked Messengers